Although in most cases a person’s job or career is unaffected when they enter into an IVA (Individual Voluntary Arrangement), there are still some instances where it could cause trouble for certain professions. There are no laws currently in place that state employers must be informed of their employee’s financial status, meaning that usually no one will find out about your IVA unless you tell them. However, this does not mean that there are never any consequences for having an IVA – just that they’re rare. This article aswers the question “Can An IVA Affect My Job”
In some instances, it is a requirement in the employment contract that you cannot become insolvent or else your current employment status will be affected. The conditions of this clause depend on the fine print of the contract itself. For example, whether you can no longer practice your profession or if certain other conditions need to be met first so that you can keep your job.
What Jobs Roles Could Be Affected by an IVA?
The people whose jobs are most likely to be affected when they enter into an IVA are those who work in industries that require them to handle or give advice about money. Examples of these kinds of industries include:
- Bankers Financial Advisors
- Insolvency Practitioners
- Property Conveyancers
This is just selection of the main industries in which being insolvent such as being in an IVA can breach the terms and conditions of your employment. If you have concerns about how entering an IVA can affect your specific job, you should liaise with your HR department, your trade union or check your contract yourself to see if there are any IVA employment restrictions.
How Will an IVA Affect My Self Employment?
IVAs are not just for individuals–business owners can enter into them as well. In fact, many businesses have been able to stay afloat during tough times with the help of an IVA. If you’re a company director, you usually won’t be forced out of your position if you enter into an IVA (unlike during bankruptcy proceedings), but it’s always best to check your company’s Articles of Association before looking into an IVA.
Entering into an Individual Voluntary Arrangement (IVA) is possible as a self-employed individual, but you will need to first give extensive documentation like income and expenditure records, as well as a cash flow projection. This is to demonstrate that your own business can last during the entirety of the IVA. If any of your suppliers are included in the agreement, they may limit credit lines in the future which could then affect your ability to keep trading. Consequently, it’s critical that you comprehend whether or not this would have an impact on your company before moving forward with anything.
If you are the director of a limited company of a struggling business, you may also wish to consider utilising the services of an insolvency practitioner to discuss how to deal with the debts of the business. Please see our sister site – Company Doctor for more information about this.
Will An IVA Affect My New Job Application?
In sectors outside of finance and public service, bankruptcy generally will not negatively impact job prospects. The majority of employers won’t perform credit checks to assess your credit rating during the hiring process – unless the position requires handling money – and they cannot perform financial checks such as running a credit check without your consent.
Should I Tell My Employer About My IVA?
Your individual details will be on the public record via the Individual Insolvency Register which is a public register, but it does not reveal specifics of your IVA proposal. Details of what remains confidential between you, your Insolvency Practitioner and creditors are: the level of your debts, reason for financial difficulties, who you owe money, whether you have had a payment break to or monthly payment terms.
If you’re employed and don’t want your employer learning about your financial problems, that’s usually okay–unless your contract says otherwise. Still, we advise being honest with whomever you work for.
Although it may be difficult, it is usually best to tell your employer about your plans to enter into an IVA. If you have built a good relationship with them and trust them to be understanding and discreet, they may actually offer more support than you anticipate.
If You Require Further Advice or Guidance
If you are in debt and worried about whether entering into a debt solution will have a negative affect on your employment, please feel free to contact us here at Become Debt Free so that we can assess your financial circumstances and provide you with debt advice.
We can advise you whether an IVA is suitable to your circumstances and advise what other debt solutions are appropriate. Get the debt help you need